Factors to Consider for Streamlining Operations and Ongoing Success
FT-NIR Spectrometer / TANGO™ Bruker / www.bruker.comEnvironmental testing had been a sleepy marketplace until the U.S. Environmental Protection Agency began issuing strict regulations for air, soil, and water in the 1970s. Environmental law spawned thousands of large and small laboratories, many of which had been operating in nonenvironmental industries. The boom years, roughly 1972 to 1990, were followed by several waves of consolidation, one of which is occurring now.
The highest-growth areas for environmental testing are emerging economies in Europe, India, East Asia, and South America, where environmental awareness is only now coming into its own.
Find your niche
Gas Chromatography System / Master GC GenTech / www.gentechscientific.comDue to heavy consolidation within the environmental testing business, starting a lab from the ground up is expensive and time-consuming. Startups are therefore advised to uncover some competitive advantage such as location (proximity to sampling sites) or some specialty based on expertise, analytical capability, or timeliness.
“We make no pretense about being a national lab,” says Scott Hanson, president of Cardinal Environmental (Sheboygan, WI), a small microbiology lab. “Our niche is quick turnaround: analyzing many parameters with very short hold times.” Since most of Cardinal’s customers are within a three-hour drive, Cardinal maintains a staff of couriers rather than relying on shipping companies. “Personal couriers are the best insurance for full compliance.”
Cardinal picks up even just a single sample from a customer site but may test that item for numerous parameters. The company prides itself on timeliness, but sometimes science and scheduling get in the way. For example, biological oxygen demand (BOD) takes five days. A sample requiring analysis of BOD plus lead and hydrocarbons will therefore take five days even though the last two analyses are done rapidly.
The decision to maintain certification for specific parameters is complex, Hanson notes. “It must be based on demand historically and moving forward. Certification for a new parameter can take months and thousands of dollars. You need to choose your battles,” he adds.
Self Regenerating Suppressor Dionex™ SRS™ 500 / Thermo Fisher Scientific www.thermoscientific.comFew clients understand that QC samples or standards must be run with each analytical batch, regardless of size. The problem arises when there are only a few samples or where the QC samples outnumber the actual samples. “Small batches, combined with quick turnaround, sometimes become loss leaders,” Hanson admits.
Contract labs may run just three or four parameters per day. A sample might require ten parameters, but one of them will not be run for several days, thus delaying the report. “Clients sometimes assume you just take the sample and dump it into a machine and that’s that,” Hanson says. “That sometimes works. Inductively coupled plasma gives you several metals at once. But it’s not true for most assays.”
Labs can choose their niche properly and do everything right but still run into difficulties. “Competing with the big boys is difficult because they enjoy the economy of scale,” says Joe Weitzel, global environmental marketing manager at Agilent Technologies (Santa Clara, CA). “They can run a lot of samples, have many methods at their disposal, and can turn samples around quickly. They also tend to have more state certifications.”
Testing labs that have already found their sweet spot outside environmental testing might also consider branching into that field. From the perspective of operations, equipment, and methods, food testing comes closest to environmental testing.
The major overlaps between the two fields are contaminants common to foods and environmental sources, such as herbicides and pesticides found on plants and in soil and water. Analytical methods, instrumentation, and mandated limits for these compounds are similar but not identical. The exact protocol depends on the matrix and the source (e.g., bottled water and samples from a reservoir).
There are significant differences between food and environmental testing as well. Food nutrient and quality testing have no counterparts in the environmental arena. Labs wishing to provide the gamut of environmental and food testing must therefore possess very broad analytical capabilities.
Instrument strategies
Gas Chromatograph / Tracera Shimadzu / www.ssi.shimadzu.comInstrumentation is a barrier to starting any lab. Chromatography, mass spectrometry, and tandem methods can run from tens of thousands of dollars to several hundred thousand. The silver lining: most lab equipment is multipurpose with respect to analytes, matrices, even industries. “Food testing shares many of its instruments with environmental [testing],” says Brent Mussato, president, CARO Analytical Services (Richmond, BC). “What changes are the accreditations and the expertise required to run that equipment.”
CARO, a “straight ahead” environmental testing firm, analyzes for hydrocarbons, metals, and microbes through a wide range of instruments and methods.
As instrumentation becomes more expensive, cost of ownership enters more meaningfully into the overall cost equation. CARO used to work in what Mussato calls Band-Aid mode, where equipment was kept for as long as possible. Now many instruments are updated as frequently as every three years.
One reason is that new zero-tolerance regulatory standards demand more-sensitive instruments. The other issue relates to cost accounting. Maintenance and downtime become critical as equipment ages. “After an instrument has been depreciated, it still costs $12,000 per year for the service contract. But when you include downtime, the cost is much higher. In this commoditized market, getting work out the door is essential,” Mussato notes.
Frequently enough, regulators revise concentration standards downward for contaminants. “They are never going to say that you can have more arsenic in drinking water,” observes Fiona Adamsky, general manager at Benchmark Analytics (Center Valley, PA). When this occurs, labs often find themselves stuck between the new standards and equipment incapable of meeting them.
Miniature Spectrometer EMBED / Ocean Optics www.oceanoptics.comThe relationship between instrumentation, environmental labs, and EPA regulations is complex, almost symbiotic. Many EPA methods from the 1980s are still in use today. One often hears of “legacy” methods as an excuse for not upgrading to ultrahigh-pressure liquid chromatography. Many labs continue to use chromatography systems that manufacturers stopped supporting (or even selling) decades earlier.
Despite the persistence of legacy methods, instrument technology evolves, as do specifications for environmental analysis. Methods developed for packed GC columns are now run more rapidly and with higher resolution on capillary columns. The parallel between large-bore HPLC and sub-2-micron columns has been amply documented.
Yet the pull of modern analytical technology is powerful. Newer methods resulting from changing environmental standards and the emergence of unknown contaminants allow labs to differentiate based on higher sensitivity or improved compound discrimination. From the instrumentation perspective this becomes an interesting “chicken or the egg” question: whether instrument sensitivity drives legally permitted contaminant levels or it is the other way around.
Joe Weitzel believes both factors are operative. “New methods are always being introduced, say, for drinking water, that push the envelope of what labs are capable of and what is possible. But federal regulatory compliance is definitely a driver, both in instrument development and purchases.”
Automation
Air Sampling Products FUZION™ / Torion www.torion.comDue to the highly competitive nature of environmental testing, automation has become an essential ingredient. “Labs can’t survive today without it,” according to Weitzel. “And I’m not talking only autosamplers. Workflows must incorporate automation whenever possible for a lab to remain competitive.” Most environmental labs work two or three shifts, which makes automation a “no brainer.” “If they have two shifts, you can be sure they’re loading up the autosamplers before they leave for the day.”
In addition, most automated labs operate under a LIMS (laboratory information management system) for tracking samples entering and leaving workflows. The LIMS tends to be connected to all instruments, even routine analyzers such as pH meters.
Computerization provides the tools to demonstrate data integrity. “We should be able to recreate any calibration or data point that we report,” says Benchmark Analytics’ Adamsky. “Because we’re operating under regulatory compliance, the data we generate must be legally defensible.”
For legal or regulatory proceedings, laboratories should be prepared to send all raw data, instrument calibration reports, quality control protocols, and, of course, results. Adamsky refers to these as “data quality packages.”
Alternative models
High level, high skill
Not every environmental testing organization follows the “low skill” route that is so common to modern labs. MVA Scientific Consultants (Duluth, GA) prides itself on retaining “quite a few PhDs and master’s-level scientists,” according to Steven Compton, PhD, senior research scientist. “We don’t employ many individuals who lack college-level training.”
MVA calls itself a “boutique” organization. “We don’t perform routine, highthroughput testing. We’re more outside the box, providing critical thinking for customers,” Compton says. MVA focuses on solving problems such as identifying an unknown contaminant or locating its origin. The company’s skill set includes chemistry, geology, forensics, and environmental science. Even the few automated tests the company does run demand high-level knowledge and data interpretation. One MVA specialty is microscopy/imaging employing FTIR and Raman, which are not conducive to black-box analysis.
MVA recently worked on a “detective” case involving a child who exhibited signs of lead poisoning. The initial suspicion was lead-based household paint, but none of the surfaces in the child’s home qualified. But dust samples collected from the home indicated the presence of fly ash containing lead—a situation that a “normal” lab probably would not pick up. A survey of the neighborhood uncovered a company that was storing fly ash and releasing it into the environment. “Once the results came in, the EPA swooped in and declared the location a Superfund site,” Compton relates.
Atomic Absorption Spectrometer / Accusys 211 Buck Scientific / www.bucksci.comBring the lab to the site
Fee for service is not the only model for environmental laboratory startups. Often, companies involved in fieldwork—mining, agriculture, electrical power, oil and gas exploration, and environmental remediation—operate in far-flung geographic areas that are hundreds or thousands of miles from the closest analytical lab. These firms require a facility that can provide highquality, near-real-time analysis of samples from soil, air, and water. That is where firms such as GF Environmental Labs (Mandeville, LA) come in.
GF designs and stocks modular, portable environmental laboratories and delivers them worldwide. “Field labs provide data that is higher-level than what you might get with field instruments,” says VP Gene Joanen. “We bring the party to the field.”
Joanen built GF Environmental as a division of Germfree Laboratories, which specializes in modular biocontainment labs. Business has been booming for the last two years, Joanen says.
The mobile labs are based on eight- or ten-foot-wide modular structures that can be loaded onto trucks or airplanes. Wider buildings are constructed by joining two or more units. Joanen devotes about 15 percent of the floor space to “mechanicals” and utilities. Customers specify their own equipment, which dictates the lab’s interior design. Utilities are pumped in, and exhaust air is vented to the outside.
One unit, assembled for a major oil company, measures 16' x 40' and has common benchwork running down the middle. “Lab managers have told me that brickand- mortar labs can’t hold a candle to modular space in terms of efficiency, control, and ergonomics,” Joanen says. “We have administrative and control capabilities that are beyond what you see in conventional buildings.”
Another project, to support a petrochemical company’s center of excellence, is a 16' x 40' structure that has been up and running since February 2013. “When its mission is completed, they’ll pick it up, move it to a new location, and use it over and over again.”
Eight Facts To Consider Starting an environmental laboratory from scratch is not for the fainthearted. Costs are high, and competition is fierce. Moreover, this segment of the analytical testing market has experienced significant consolidation as it finds itself in a twenty-five-year price war. The following “tips” outline some (but by no means all) of the factors to consider when entering this business.
Start-up expenses are substantial. Turning a building into a laboratory requires substantial time, money, and expertise. Starting an environmental laboratory is easier if the lab infrastructure is already in place, say, in the case of a food lab adding some environmental tests. But managers should beware of differences in hazards, analytes, workflows, and certification requirements. Opening a drinking water lab with limited testing parameters in one state is one thing; creating a full-service, multistate environmental lab is quite another.
Building, infrastructure, and utilities can vary widely by industry. The needs of environmental labs are similar to other laboratories’ and are much too varied to discuss here in detail. Two critical considerations are electricity and water. “Dirty” power that can wreck instruments and computer systems is relatively rare in the United States, but this is definitely a consideration. A potential lab’s water and sewer utilities are of greater concern. Water must be of quality suitable for converting into pure lab water at reasonable cost. Managers should also be aware of local wastewater regulations, as sewers are much less expensive than carting away wastewater in drums.
Certification is non-negotiable. Depending on a lab’s geographic location and the types of analysis it expects to run, certifying bodies will expect workers and directors to possess certain capability levels in terms of instrumentation, lab skills, and academic experience (chemistry, microbiology, etc.). Every state is different, and without the proper certification managers cannot even consider opening their doors. Certification involves demonstrating expertise with specific analytes from specific matrices (e.g., soil, water). Certification requires labs to run samples “blind” and to undergo inspections by certification agencies. Regulations specify which methods are suitable for a particular parameter and matrix. Testing arsenic in drinking water, in non-potable water, and in soil represents three distinct matrices and therefore requires three different methods. Labs do enjoy the latitude to select one of several approved methods.
Have a clear mission. Labs have a higher chance of success if they focus on a specific area of the environmental business, such as wastewater or drinking water. This in turn leads to a list of analytes, which along with the analytes’ regulatory limits determine what equipment will be needed.
Technical expertise is the most important resource. Environmental labs possess many assets—building, equipment, instrumentation, utilities, computers, and information technology. But that’s not what a lab ultimately is or becomes. It boils down to hiring and retaining skilled, dedicated staff.
Labor is the largest ongoing expense—hence automation is key to remaining competitive. The average revenue per employee per year at environmental labs is about $100,000, which leaves little room for salaries, health insurance, supplies, and overhead. Environmental labs must therefore automate as much as possible. Labs must balance what they can spend on automation, which is often a capital expense, against the cost of human resources. Twenty years ago it was common to have PhD-level scientists and degreed chemists throughout the laboratory. As a result of the twenty-plusyear price war, few labs can afford even bachelor-level scientists, much less PhDs. Labs must now choose when and where to deploy high-level skills.
Beware of remote IT services. Online and outsourced data and data processing services are a distinct trend, but offsite management may not be appropriate for environmental testing. Customization is a key component of report presentation and part of the deliverable your customers expect.
Consider how best to acquire samples. Although environmental samples tend to travel well, due to timeliness and chain of custody issues few top labs rely on commercial carriers for transportation. Environmental labs can differentiate themselves by picking up samples in person, either through dedicated staff or through courier services. This may add another level of infrastructure, personnel, and expenses in the form of vehicles, insurance, drivers, and compliance with local regulations. Still, in some markets, labs that do not pick up do not get contracts. |
Factors to Consider for Streamlining Operations and Ongoing Success
Environmental testing had been a sleepy marketplace until the U.S. Environmental Protection Agency began issuing strict regulations for air, soil, and water in the 1970s. Environmental law spawned thousands of large and small laboratories, many of which had been operating in nonenvironmental industries. The boom years, roughly 1972 to 1990, were followed by several waves of consolidation, one of which is occurring now.
The highest-growth areas for environmental testing are emerging economies in Europe, India, East Asia, and South America, where environmental awareness is only now coming into its own.
Find your niche
Due to heavy consolidation within the environmental testing business, starting a lab from the ground up is expensive and time-consuming. Startups are therefore advised to uncover some competitive advantage such as location (proximity to sampling sites) or some specialty based on expertise, analytical capability, or timeliness.
“We make no pretense about being a national lab,” says Scott Hanson, president of Cardinal Environmental (Sheboygan, WI), a small microbiology lab. “Our niche is quick turnaround: analyzing many parameters with very short hold times.” Since most of Cardinal’s customers are within a three-hour drive, Cardinal maintains a staff of couriers rather than relying on shipping companies. “Personal couriers are the best insurance for full compliance.”
Cardinal picks up even just a single sample from a customer site but may test that item for numerous parameters. The company prides itself on timeliness, but sometimes science and scheduling get in the way. For example, biological oxygen demand (BOD) takes five days. A sample requiring analysis of BOD plus lead and hydrocarbons will therefore take five days even though the last two analyses are done rapidly.
The decision to maintain certification for specific parameters is complex, Hanson notes. “It must be based on demand historically and moving forward. Certification for a new parameter can take months and thousands of dollars. You need to choose your battles,” he adds.
Few clients understand that QC samples or standards must be run with each analytical batch, regardless of size. The problem arises when there are only a few samples or where the QC samples outnumber the actual samples. “Small batches, combined with quick turnaround, sometimes become loss leaders,” Hanson admits.
Contract labs may run just three or four parameters per day. A sample might require ten parameters, but one of them will not be run for several days, thus delaying the report. “Clients sometimes assume you just take the sample and dump it into a machine and that’s that,” Hanson says. “That sometimes works. Inductively coupled plasma gives you several metals at once. But it’s not true for most assays.”
Labs can choose their niche properly and do everything right but still run into difficulties. “Competing with the big boys is difficult because they enjoy the economy of scale,” says Joe Weitzel, global environmental marketing manager at Agilent Technologies (Santa Clara, CA). “They can run a lot of samples, have many methods at their disposal, and can turn samples around quickly. They also tend to have more state certifications.”
Testing labs that have already found their sweet spot outside environmental testing might also consider branching into that field. From the perspective of operations, equipment, and methods, food testing comes closest to environmental testing.
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